SINGAPORE: Palm oil may fall to 4,109 ringgit per tonne, as it faces a strong resistance at 4,289 ringgit.
The resistance is identified as the 161.8% projection level of an upward wave c from 3,817 ringgit.
Most likely, this wave will end around this level, to be followed by a decent correction. The expected drop would make invalid a break above a lower resistance at 4,209 ringgit.
The contract may pull back towards a falling trendline.
The pullback has been absent ever since palm oil broke the line.
A break above 4,289 ringgit may not lead to an impressive gain.
Most likely, the gain will be limited to 4,360 ringgit.
On the daily chart, an inverted head-and-shoulders may have completed.
The pattern suggests a medium-term target of 6,000 ringgit.
Palm oil to rise to 4,289 ringgit
So far, the rise has been slow paced.
It is unlikely to extend above a resistance at 4,331 ringgit over the next few days.
This barrier is near the peak of a wave B, which also established a similar resistance.
A retracement to 4,070 ringgit will be good for the next round of rally.
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